May. 18, 2018

Marlene Street Forest


Marlene Street Forest

Managing Director, Jamaica Stock Exchange

TBY talks to Marlene Street Forest, Managing Director of the Jamaica Stock Exchange, on facilitating capital formation, encouraging compliance, and remaining in synch with the government's growth plans.


Marlene Street Forest is the Managing Director of the Jamaica Stock Exchange and director of both its subsidiaries. Her mandate is to continue the process of developing the JSE Group and particularly the exchange, in an atmosphere of transparency and fairness while utilizing appropriate technology in providing the greatest possible efficiencies to the market. Street Forest has a wealth of experience having worked in senior management positions at varying private and public sector organizations in Jamaica and overseas. She studied management at the University of the West Indies, Mona, and later gained her master’s degree in business administration from Barry University in Florida.

How would you evaluate your impact on the Jamaican economy?

Our role is to facilitate capital formation and secondary market activities, and the role of which is extremely important to the Jamaican economy. This is especially significant in light of the fact that it is very difficult in most cases for SMEs to get capital to grow, expand, and compete. When the interest rate is high, it is even more critical that the stock market plays a pivotal role in ensuring that these companies can be properly capitalized and that there is a place for them in terms of growing the economy. While we cater to all companies seeking to raise capital, since 2009 we have focused heavily on ensuring that the facility to raise capital is attractive and, as a result, have partnered with the government in terms of special dispensation for SMEs to raise capital on the market. The secondary market is also extremely important. Again, going through the cycle from trading to settlement, we also have a securities depository. It is extremely important in this scheme of the capital market to encourage confidence, the raising of capital, and secondary market transactions.

What have been some recent successes of the stock exchange market?

In 2015, Bloomberg recognized us as the best-performing exchange in the world. In 2016, we were among the top 10, and in 2017 we continue to hold our own. In terms of the statistics, our results are not a flash in the pan but a result of the level of interest that people show in the market based on the fact that we have had a concentrated effort on market education. In addition, our 13 broker members have shifted their focus somewhat from concentrating too much on debt instruments to equities and galvanizing SMEs to taking advantage of the market. The fact is that every subscription since 2009 has been oversubscribed, which means people are also recalibrating their portfolio such that instead of concentrating heavily on fixed-income securities or banks, part of those funds are flowing into the capital market.

What incentives are in place to enter the Jamaican Stock Exchange?

In 2009, we felt it was important to grow the equities market, and our discussion with the government was on growing both the supply and demand side of the market. The government decided that on its end it would provide companies with a tax holiday. SMEs have a 10-year tax holiday, namely five years where they pay no corporate tax and another five years where they pay 50% of the prevailing rate. There is always the question of whether the government has the resources to forego those taxes; however, all the studies we have conducted have shown the move is tax positive. The government may provide relief on corporate taxes but PAYE, NIS, NHT, and GCT taxes all show tremendous growth for the government. Therefore, it is a win-win situation as companies become more compliant, those on the stock exchange are more sustainable, and there is significant growth seen when a company lists as there is immediate transformation and growth, no matter from the standpoint of corporate governance or profitability.

What are your current projects and do you plan to have more companies listed?

We certainly do, which is why we have partnered with the Multilateral Investment Fund, an arm of the IDP. The idea was to promote access to equity capital, and the project takes us to potential listing companies to talk about their appetite to come to market and see where they have deficiencies. We assist the companies in terms of their business plans, financials, corporate governance, and any other aspect that may prevent them from coming in. The project has been extremely successful, and we have many SMEs preparing themselves for market in the pipeline. This speaks of the sustainability of the exchange and of being in synch with the government's thrust for growth.